Earlier this week, the legislature passed AB 1482 by Assemblymember David Chiu. The bill would prevent large rental increases by landlords.
Following the passage by the legislature, Governor Gavin Newsom issued a statement.
““In this year’s State of the State address, I asked the Legislature to send me a strong renter protection package. Today, they sent me the strongest package in America. These anti-gouging and eviction protections will help families afford to keep a roof over their heads, and they will provide California with important new tools to combat our state’s broader housing and affordability crisis,” Governor Newsom said.
He added, “I would like to thank Assembly Speaker Rendon, Senate President pro Tempore Atkins, Assemblymember Chiu and the bill’s co-authors for passing this legislation, as well as the broad coalition of stakeholders whose persistence allowed this bill to move forward.”
Proposal to combat housing crisis by protecting renters from large rent increases and unfair evictions advances
(From Press Release – Assemblymember Chiu)--A major renter protection bill aimed at keeping struggling California tenants in their housing passed the Senate floor today by a 25-10 vote. Assembly Bill 1482 would cap annual rent increases and give renters added eviction protections.
Today’s vote follows on the heels of an announcement last month by Governor Gavin Newsom, Senate President pro Tempore Toni Atkins, Assembly Speaker Anthony Rendon and Assemblymember Chiu of an agreement on the final form of the bill.
“Renters—who work in our schools, hospitals, small businesses, and emergency services—deserve to be protected from egregious rent increases and capricious evictions that could leave them homeless,” Atkins said. “It’s not every day where you’re able to get tenant groups and business interests to come together to compromise on getting some very significant relief to renters, and I want to thank Assemblymember David Chiu, and all those who have negotiated the bill, for bringing us this important legislation.”
AB 1482 is authored by Assemblymembers David Chiu (D-San Francisco), Rob Bonta (D-Oakland), Timothy Grayson (D-Concord), and Buffy Wicks (D-Oakland).
“In the midst of the most intense housing crisis in California history, we must take decisive action to stem the tide of displacement and homelessness,” said Assemblymember Chiu. “Keeping renters in their homes is crucial to addressing our housing crisis. Thank you to my colleagues in the Senate for approving this bill to protect millions of renters from large rent increases and unfair evictions.”
“This is a historic day in the California legislature. Our state’s renters have been heard and are now poised to gain the legal protections they need and deserve,” said Assemblymember Bonta. “AB 1482 will fight rent gouging and unjust evictions to help protect millions of Californians who rent the place they call home. I’m proud to be a joint author of this transformative legislation and look forward to it becoming law.”
“This is a huge step towards delivering stability and security to millions of Californians,” said Assemblymember Grayson. “AB 1482’s coalition of support continues to grow, encompassing not only tenants, but also property owners, builders, and some of the largest employers in the state. I’m looking forward to working with leadership and my fellow authors to move this bill past it’s final hurdle.”
“Our housing crisis is causing instability for renters across our state,” said Assemblymember Wicks. “AB 1482 provides some much-needed relief, with stronger protections to keep tenants in their homes — by protecting renters from the most egregious of rent increases and unjust evictions.”
If enacted, AB 1482 would cap annual rent increases in California to the Consumer Price Index (CPI) plus five percent. CPI varies by metro area, but it averages roughly to 2.5 percent in California. Thus, under the cap of CPI plus five percent proposed in AB 1482, annual rent increases would be capped to approximately 7.5 percent throughout the state. Rent increases could not exceed 10 percent under the bill.
Additionally, the bill would give tenants “just cause” protections, prohibiting a landlord from evicting a tenant without showing a reason for the eviction in an effort to prevent discriminatory, arbitrary, and retaliatory evictions. Protections would only be in effect after a tenant has lived in a unit for more than 12 months and would be limited to those rental units also subject to the limit on rent increases.
The bill will sunset after ten years and also exempt new rental units that are up to fifteen years old so that new housing production is not stifled. AB 1482 will also exempt all single family homes that are not owned by corporations or real estate investment trusts.
Tenants have been hit especially hard by California’s housing crisis. Skyrocketing rents and an increase in evictions have led to mass displacement and a severe homelessness crisis.
Over 80 percent of California’s 17 million renters do not have access to stable and affordable housing. Over half of California renters are rent-burdened, meaning they spend over 30 percent of their income on rent, and one-third of renters spend over 50 percent of their income on rent. 160,000 families appear in eviction court annually.
While egregious rent increases are a serious issue for renters and have been widely documented, data sourced from the Bureau of Labor Statistics shows that rent increases above the cap proposed in AB 1482 are actually outside of the norm and represent true rent gouging. The data reveals that the proposed cap of CPI plus five percent is twice that of the median annual rent increase. Further, capping rents at that level would still allow landlords to generate a healthy profit from rental properties.
The State of Oregon recently passed similar laws to protect tenants from unfair evictions and limit annual rent increases. UC Berkeley’s Terner Center for Housing Innovation has also identified a rent cap and just cause eviction protections as key policies to alleviate California’s housing crisis. Recent analysis from the Terner Center suggests that AB 1482 would not stifle housing production in California.